Ontario Liberals may have failed to drop auto insurance rates by 15%, but brokers may be pleased by a new plan designed to combat fraud and reduce premiums.
 
The government just proposed a new set of rules intended to place heightened scrutiny on tow truck services and combat fraudulent practices that lead to higher insurance costs, CBC News reports.
 
One of the most common among these involves tow trucks drivers who bring immobilized vehicles to certain pre-selected garages that reward them with unreported kickbacks. Another is caused by fraudsters who earn extra cash by placing cars in storage lots, in some cases for weeks at a time, without the knowledge or consent of its owner.
 
Government leaders believe that the tow truck industry is “partly to blame” for the province’s staggeringly high auto insurance premiums.
 
“It adds to ultimately the cost that the insurance company needs to pay out, which has the effect of driving rates up for all Ontarians,” Consumer Services Minister David Orazietti told the CBC, noting that “most” companies remain ethical.
 
So far, the rules contain such provisions as:
 

• Requiring tow truck operators to display their rates publicly
• Providing consumers with a documented quote before the truck departs with the vehicle
• Pre-disclosure of where the tow truck driver intends to take the car, and whether there is any financial incentive for choosing that location     

 
Brokers and other insurance professionals who wish to share their thoughts and feedback on tow truck operations are encouraged to do so here.